Job market changes focus as credit crunch begins to bite

The global financial crisis is reshuffling Russia's job market. Financial sector and real estate workers are suffering. But Russian state-owned companies and manufacturers now have a chance to hire top managers who were previously too expensive.

A letter tells staff at a Moscow property developers that they are being fired. The head of the BIG development group Maksim Rogalsky placed it on the company's website, announcing a freeze of all new projects, and cutting salaries along with 40% of staff.

“It's a big problem for these people. I hope they will find their jobs because these are all brilliant people, I have hand-picked them myself. There are rumours that on the construction market there are going to be more than a million people unemployed.”

Real estate – highly dependent on short term loans – is among those hit hardest by the banking crisis. Other victims include retailers, manufacturers and small and medium size businesses. The financial sector, especially investment banking will suffer the most – losing up to 30% of jobs. But George Abdushelishvili, Head of Ward Howell, Russia and CIS, a major headhunter, says not everyone will lose.

“Its even a better situation in terms of redistributing those talented people in a variety of other industries and state owned industries. Even into the government. Now our government, our ministries, our political parties, have now the opportunities to attract those people into their organizations.”

He also says that, even if not fired, top managers will have to tighten their belts. The huge gap between the pay of senior managers and average salaries across the market will soon narrow.

“Everybody was overpaid! Was heavily overpaid. The junior young people were quoting seven digit numbers like millions and millions and it was not backed up by experience. So the salaries and bonuses and overall cash compensation of companies will go down which will make a healthy impact on peoples minds and the overall economic situation.”

Developer Maksim Rogalsky says, he is not even thinking about profits for now.

“The captain will leave the boat the last. And we are ready for losses and we will do our best to fulfill our obligations. For myself, lets see.”

He pledges to complete existing projects and will hope to be able to take on new ones. For now, however, survival is his first concern.